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Lost Bid on Foreclosure
Hi. My question relates to how the listing agent on a foreclosure handles the deal.
We recently lost out on a foreclosure. Here is the scenario.
Our agent called one afternoon around 2 and said the bank had asked for our "highest and best" offer. The deadline to answer back was 4 p.m. We did raise our offer.
That same afternoon around 4:30, we got another call from our agent. I missed the call because I was in a meeting. She said we were being given another chance to raise our offer, because a second offer was now in the mix.
Next morning, I called our agent back and again we raised our offer slightly. She said she hoped she could get it submitted in time.
Later that afternoon we were told we lost the house. The listing agent told our agent that the bid he submitted was the winning bid, our bid was a little lower, and a third bid was lower still.
I asked our agent for something in writing from the bank, stating that our bid had been rejected. When I pressed her for information, she forwarded to me an email that was signed by the listing agent. It just said that our offer had been rejected. She also said that everything is done online now and this is all she could find.
This was a Homepath listing.
If everything is done online, with the bank, how did the listing agent know how much our bid was for? I'm wondering if our bid was even submitted.
Any insight will be appreciated.
Hello Peggy. Welcome to BP!
The listing agent would receive details regarding all the bids placed, even when done online. It is their job to coordinate the sale so they would have to receive that information. It is also not uncommon for you not to get anything in writing from the bank. It is very difficult (if not impossible) to receive any correspondence with the bank other than "accepted/rejected". It is hard not to be skeptical when the listing agent's client wins the bid. Ethically the agent should not disclose the details of other offers to their buyer, but it happens.
Hi Eric, thanks for the insight.
The whole thing just seemed a bit strange. The house had been on the market for a couple of months, with only one rejected offer during that time. Then as soon as we placed an offer, two other offers showed up.
Our agent made a mistake too that I think could have affected our chances. We signed the papers on a Wednesday morning. Because I wanted to do a bit of research on a different loan product, I was to call her first thing the next morning so she could immediately submit the bid.
She called me at 4 p.m. that afternoon, and she was just getting started on it and discovered that there was other paperwork to be completed that she was unaware of. We were out of town until Monday morning, so we could not sign the other documents.
The "new" documents were signed early Monday morning, and then submitted. The back and forth with "highest and best" began the next day.
I feel like if there hadn't been a delay in submitting the bid, the outcome may have been different.
Lesson learned. Use an agent who has experience with foreclosures.
Another lesson was learned. You initially delayed the offer so you could "
research on a different loan product." If not for that, you might have gotten your offer in before the others. Timeliness matters.
I've bid and lost out on four houses in the last few weeks. I've also bid and been rejected on two or three others. In this business, it happens. Years ago, my first bid went a lot like yours. Like you, I was skeptical regarding the circumstances and listing agent. Now, I just keep it moving to the next potential deal.
Good luck next time around.
Peggy,
This is a constant source of frustration for investors and their agents! Everyone wants a level playing field and the idea that there is funny business going on behind the scene can drive you nuts. This is an issue with all real estate listings not just REO and HUD homes. As supply of good investment property continue to be tight, your experience is likely to become more common.
The listing agent can see your bid on Homepath. As a result, many listing agents are accused of coaching their clients on what to bid. In my experience however they usually don't. The most likely scenario is that your bid was entered by your agent and someone else was willing to pay more.
All we can control is what we do. In a sellers market, which almost every area of the country is in right now, I advise my clients to pay a price that is enough that they will be comfortable if they lose the house to a buyer who is willing to pay more. In that case you can just move on to the next one. My advice:
1.Have very clear criteria on what and where you buy.
2.Be the leading expert on value for that type of property.
3. Make offers quickly that are likely to be accepted for properties that fit your criteria.
4. Don't feel bad if someone who knows less than you overpays.
Good luck on your next buy!
Always submit your "highest and best" that way, you don't cry yourself to sleep knowing you would've paid more. Either they take it or its not worth it to you. Timeliness also goes out the window in that case
I don't think delaying the offer for a few hours while I did a bit of research had much to do with it. My agent called the listing agent as we were writing the offer and he said there had only been one offer in all the time the house had been on the market. He told us the amount of the rejected offer.
In effect, our offer was the only one in play. The other two came about over the weekend, 3 days after our offer should have been submitted.
But yes, I won't delay next time. I hate learning lessons like this. ;-)
Maybe I am too cynical but I think it happens all the time. I had a long time friend who became a Realtor later in life. He's dead now but for years he would call me with 'deals' like this. I would always have to supply the cash that day or the next day. No wait; sometimes he would front me the money and then come to me with a done-deal. "You just bought this - I need a check." <g>. And my bid was only ever highest by a hundred dollars or so. <g> I never really thought about it this way then - but now that I am I just realized that my Realtor was always the listing agent.
stephen
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Originally posted by @Eric Thomson:
Hello Peggy. Welcome to BP!
The listing agent would receive details regarding all the bids placed, even when done online. It is their job to coordinate the sale so they would have to receive that information. It is also not uncommon for you not to get anything in writing from the bank. It is very difficult (if not impossible) to receive any correspondence with the bank other than "accepted/rejected". It is hard not to be skeptical when the listing agent's client wins the bid. Ethically the agent should not disclose the details of other offers to their buyer, but it happens.
I was really disappointed in losing this house. We weren't buying it as an investment, instead it was to be our "forever home." It needed to be totally updated, but the potential was there.
Whoever won the bid is an investor. They'll go in and make it very vanilla, then turn a profit.
Sigh....
Your agent should have used a service like DocuSign so you could have signed immediately. However, in the past few weeks we have had numerous multiple offers that have come out of nowhere. We could have a house sit there for months with no interest and then multiple offers. Just catching people's attention at the right time. Next time, make your highest and best and use electronic signatures.